UNITED STATES OF AMERICA
Before the
COMMODITY FUTURES TRADING COMMISSION

LORENZ HOFF

v.

AMERICAN FUTURES GROUP, INC.

CFTC Docket No. 96-133

ORDER

Reparation complainant Lorenz Hoff ("Hoff"
or "complainant") is a German resident. For a non-resident to
bring a complaint in the Commission's reparation forum it is a
jurisdictional prerequisite under Section 14(c) of the Act and Commission
Rule 12.13(b)(4) that he or she must file a bond in double the amount of
the claim or submit a waiver request "accompanied by sufficient
proof" that the country of which the complainant is a resident
permits the filing of a complaint by a resident of the United States
against a citizen of that country without the furnishing of a
bond.

On April 20, 1998, the Commission issued an order in
the above matter granting complainant an opportunity within 60 days of
the order to post a bond or to submit a sufficiently supported waiver
request. Hoff v. American Futures Group, CFTC No. 96-R133, 1998 WL
187850 (CFTC April 20, 1998). The Commission found that Hoff apparently
had filed his complaint in reliance on a right to a waiver of the bond
predicated on Section 110 of the German Code of Civil Procedure
("German Code"). The Commission noted, however, that it had
recently held that Section 110 was insufficient to support the bond
waiver reciprocity requirement in Rule 12.13(b)(4). Haekal v.
Refco, [Current Transfer Binder] Comm. Fut. L. Rep. (CCH) ¶
27,162 (CFTC Sept. 26, 1997). Specifically, the Commission held in
Haekal that Section 110, when read in conjunction with Article VI of
the German-American Treaty of Friendship, Commerce and Navigation and
Paragraph 6 of the Protocol to the Treaty, limits the circumstances under
which a United States resident is not required to post a bond and,
therefore, does not satisfy the reciprocity required by Rule 12.13(b)(4).
Id. at 45,543.

On June 17, 1998, complainant submitted a response to
the Commission's order. He first argues that he should not be
required to submit evidence on the jurisdictional issue supporting a
waiver request because his filing fee was accepted and the proceedings
reached the appeal stage. Appellate brief ("AppBr.") at 2. He
cites several provisions of the German Code in support. He principally
argues, however, that Section 110 of the German Code, together with a
treaty which he terms the "Agreement Haag," dated March 1,
1954, provides the reciprocity that forms the basis for a valid waiver of
the bond requirement. AppBr. at 3.

With respect to the timeliness of the Commission's
consideration of the bond issue, Hoff asserts that Section 111 of the
German Code states that an additional bond "cannot be required after
the beginning of the proceedings." AppBr. at 2. He also cites
Section 282 III, claiming that it also provides that a complainant may
not be subjected to additional requirements after the beginning of the
proceedings. Id. Finally he cites Section 296 to argue that
"in appeal proceedings it is not admissible to make up for a review
failed by the court of the first instance." Id. These
provisions are not relevant, however, because the German Code is not the
governing body of law as to this issue, and under Commission practice the
Commission will address the jurisdictional issue of the bond requirement
suasponte, even if the issue has been overlooked or
abandoned by the parties. Haekel at 45,542.

Complainant's main argument is that Section 110 of
the German Code and the treaty he cites establish the right to a waiver
of the bond requirement. App. Br. at 3. Although Hoff did not submit a
copy of that treaty, we have located a multilateral treaty relating to
civil procedure done at the Hague on March 1, 1954, which appears to be
the relevant document. However, the United States is not a party to this
treaty. In these circumstances, we conclude that Hoff has not offered a
persuasive reason to depart from our holding in Haekal and has
failed to offer sufficient proof supporting his request that the
Commission waive the bond requirement.

Accordingly, because Hoff has not demonstrated that he
is entitled to a waiver of the bond requirement and has not filed a bond,
we dismiss his appeal.

By the Commission (Chairperson BORN and Commissioners
TULL, HOLUM, SPEARS and NEWSOME).

Jean A. Webb

Secretary of the Commission

Commodity Futures Trading Commission

Dated: November 3, 1998

1 Under Sections
6(c) and 14(e) of the Commodity Exchange Act, 7 U.S.C. §§ 9 and
18(e), a party may appeal a reparation order of the Commission to the
United States Court of Appeals for only the circuit in which a hearing
was held; if no hearing was held, the appeal may be filed in any circuit
in which the appellee is located. The statute also states that such an
appeal must be filed within 15 days after notice of the order, and that
any appeal is not effective unless, within 30 days of the date of the
Commission order, the appealing party files with the clerk of the court a
bond equal to double the amount of the reparation award.